China's economy grew at its slowest pace in 18 months in the first quarter of 2014, official data showed, but authorities have ruled out major stimulus to fight short-term dips in growth.

The economy grew 7.4 percent in the January-March quarter from a year earlier, slightly stronger than market expectations for growth of 7.3 percent, the data released on Wednesday showed.

However, it was China's slowest annual growth since the third quarter of 2012, when growth was also 7.4 percent.

Beijing has announced only limited measures, such as tax cuts for small firms and speeding up some investment in rail projects, to try to steady growth around its target of 7.5 percent without disrupting plans to restructure the economy.

Some analysts think the economy will continue to lose momentum into the middle of the year, Reuters news agency reported. 

Sheng Laiyun, spokesman of China's National Statistics Bureau, said the growth rate was within targeted range.

"In general, the economic growth in the first quarter stayed in a reasonable range, and progress has been made in structural adjustment, transformation and upgrading. But at the same time, we must see that the external environment remains complex and volatile, and domestic economy still faces downward pressure," Sheng told a news conference in Beijing.

"In the next phase, we must seriously implement the central government's policies and arrangements, resolutely and confidently push ahead reforms, scientifically adjust to stabilise growth, adhere to structural adjustment, change approaches, and improve people's livelihood and effectively ensure steady and healthy development of the economy," said Sheng.

Policy divide

Economists were split on the outlook, with some predicting that growth had stabilised and that the government would stand pat on policy. Others, however, thought that policy loosening was imminent.

Hong Kong-based HSBC economist John Zhu said some help was still needed from the government to stabilise the economy.

"I think, first of all, it's still very fragile in terms of, for example, the March activity data. You are still seeing some slowing momentum and of course you've had also quite a bit of a weaker data in both exports and also the M2 growth number. So we still think some help is needed just to stabilise the growth profile, but in terms of monetary policy, yes, I think it probably means that you won't get as aggressive a reaction, say, a cut in the triple R rate, or in the policy interest rate," said Zhu.

Source: Reuters